Energy Market Report - 28 May 2026 (Copy)
Energy markets firmed across the board on Thursday before the tone softened, as a tentative US-Iran ceasefire framework and the prospect of the Strait of Hormuz reopening began to unwind the geopolitical risk premium that had built up through the week. Gas and power both gained at settlement, carbon extended a strong run, and crude fell back sharply, leaving a market caught between bearish supply signals and firmer carbon.
Natural Gas
UK and continental gas settled higher on Thursday in a broad upward correction, though the front of the curve was capped by news that Norwegian operator Gassco had cancelled planned autumn maintenance at the Åsgard field and Kårstø, easing the supply outlook into October and November. NBP day-ahead closed at around 112 pence per therm and the front-month near 114, with TTF settling close to €47 per megawatt hour. The bigger driver emerged overnight, when reports of a 60-day US-Iran ceasefire extension and a potential reopening of the Strait of Hormuz pointed to fewer constraints on seaborne LNG and pressured prompt prices. Supply remains comfortable: Norwegian exports held near 292 million cubic metres per day despite an extended Oseberg outage, four LNG cargoes are due into north-west Europe next week, and mild, above-average weather is keeping demand subdued as storage fills through the injection season.
Electricity
UK power tracked the firmer tone on Thursday and outperformed gas, with the June baseload contract climbing around £2 per megawatt hour to settle near £101, supported by rising UK ETS and EU carbon prices. The main forward driver was weather rather than fundamentals: wind output is forecast to fall early next week, with a trough around Monday and Tuesday before recovering, which lifted near-dated contracts. Day-ahead baseload eased to around £102 per megawatt hour and the peak to £94 as spring conditions kept margins comfortable, with renewables meeting close to 60 per cent of demand and gas-fired generation falling to around 15 per cent; that buffer absorbed a heavy run of nuclear outages, including both Sizewell B units. On the Continent, German baseload reached a two-month high before easing, while French prompt prices stayed soft on ample nuclear and hydro.
Other Commodities
Crude led the wider complex lower, with Brent settling at $93.71 per barrel, down on the day and more than 8 per cent on the week, and WTI at $88.90, as the prospect of the Strait of Hormuz reopening eased fears over seaborne supply. Coal was steady, with ARA CIF Cal-27 little changed at $124.50 per tonne. Carbon, by contrast, extended its rally: EU allowances rose 1.8 per cent to €80.15 per tonne for their largest weekly gain in over a month, while UK ETS allowances firmed to £57.93 per tonne, both underpinning the power curve. Global gas benchmarks were mixed, with Asian JKM around $18.34 per million British thermal units and US Henry Hub near $3, while sterling was little changed at 1.1539 against the euro and 1.3443 against the dollar.